SAN DIEGO - Accounting Scandals and the Spate of bankruptcies have
outraged investors. Many are asking whether WorldCom and Enron are
isolated bad apples or somehow symptomatic of rotten corporate culture.

President Bush tried
to reassure investors when he spoke on corporate responsibility earlier
this month.

"Vast majority of
business men and women are honest. They do right by their employees and
their shareholders. They do not cut ethical corners"

Others warn that the
recent scandals point to more widespread corporate corruption. NPR Scott
Horsley reports.

Leaders of some of
America's biggest corporations have expressed shock and anger at the
recent business scandals, at the same time they've tried to corral
investors outrage before they trample on their own companies. John J .
Kasseloni is president of the Business Roundtable, an association of
leading CEOs.

"We need to keep in
mind that we're talking about a small number of more than 17,000 publicly
traded U.S companies. We very much believe that it's a few bad apples but
one is too many."

But Robert Borsage,
who directs a Washington D.C research center called the Campaign for
America's Future, says the bad apple theory is losing strength, each time
another company is force to correct its financial reporting.

"This is a lot more
than a few bad apples, and that's the thing all investors are worried
about. Every time they turn around it seems to be another, you know, even
established companies like Johnson and Johnson that's getting accused of
things or the vice president company or Xerox or companies that used to be
thought of sterling blue chip companies and so I think it is fairly
widespread."

Just how widespread is
important, not only to assess the extent of the problem but also to craft
appropriate remedies. If the scandals are indeed the fault of a few bad
apples, bobbing them out and punishing them should help. President Bush
has proposed stiffer penalties against those who commit corporate fraud.
He also called for a new ethic of personal responsibility.

"Ultimately the ethics
of American Business depend on the conscience of America's Business
leaders. We need men and women of character, who know the difference
between ambition and destructive greed, between justified risk and
irresponsibility."

But others argue even
the most responsible executive might stray from the ethical path if the
temptation is great enough. In testimony before the senate banking
committee last week, Federal reserve chairman Alan Greenspan suggested the
surging stock market of the late nineties provided that temptation,
overwhelming the good judgment of too many corporate executives.

"It is not that humans
have become more greedy than the generations past, but it is that the
avenues to express greed have grown so enormously."

Greenspan said that
poorly structured stock options gave many corporate executives a perverse
incentive to inflate short-term profits artificially. Professor Craig
Dunn, who teaches Business and Society at San Diego State University, says
with so many stock options padding their paychecks its no wonder some
executives got greedy.

"That's what happens,
because our basic assumption is that the shareholders are only in it for
the money. If we want to make CEOs like shareholders, then what we make
them into is people who are just in it for the money. Should we be
surprised then that they are not going to turn their back on fifty million
dollar salaries."

You might call this
the environmental theory. The idea that even a barrel of sweet cider goes
bad if left in the sun too long. Supporters of this theory believe
systemic reforms not just a few high profile prosecution is needed to mend
the market. Lawmakers are already discussing some systemic reforms
including new restrictions on auditors and more independent corporate
directors. Robert Borsage complains that lawmakers are not yet talking
about changing the way that companies account for stock options.

"It's going to take a
lot more public pressure, pressure from institutional investors, and
others to start to clean that up. But it is very imperative that we give
executives an incentive to make the company grow over the long term, not
an incentive just to keep the book straight for a quarter, so they can
cash out.

Fed chairman Greenspan
says just as the booming stock market spawned infectious greed a few years
ago, today's slumping market leaves little room for profiteering. Even so
he says, it's important that policies makers address the problems with
corporate governance now so that they don't resurface when the market
begins moving up again.